This week I want to talk about Larry Katz, a man who has a profound influence on my scholarly career and on the careers and lives of countless others. The impetus is a chapter that David Autor and I just completed for the Palgrave Companion to Harvard Economics, entitled “A Young Person’s Guide to Lawrence F. Katz”. If you are an economist (current or aspiring), or a person who cares about education, skills, technology, labor markets, neighborhoods, or economic inequality (which seems likely, given that you’re reading this newsletter), you should really read the entire paper.
My purpose today is partly tribute, and partly intellectual history. Larry is responsible for some of the most important ideas and findings in modern labor economics. He’s also served as a steward of the profession through his editorship of the Quarterly Journal of Economics and his mentorship of more than two hundred PhD students over the years, two of whom are David Autor and me. In his time at Harvard, Larry has served on an average of 6 dissertation committees per year. That’s staggering! He’s advised multiple John Bates Clark medal winners and MacArthur “genius” grant winners and dozens of scholars at top economics departments all around the country.
The Quarterly Journal of Economics is the top journal in economics, with an impact factor nearly double the next highest competitor. But it was not always so. When Larry took over as coeditor of the QJE in 1991, it was ranked below the average of the other “top 5” journals.1 As the figure below shows, the “treatment effect” of Larry Katz in an event study framework is positive and (probably) statistically significant. By 2022, the QJE had an impact factor more than double the average of the other top 5 journals.
I will praise Larry in this post because he deserves it. But I also want to use this opportunity to explain two important lessons that we should all learn from Larry’s work.
The first half of my Katz encomium focuses on his contribution to helping us think about wage differences between workers with different levels of education. Part two, airing next week, covers his contribution to our understanding of the benefits of living in a better neighborhood, along with some meta-commentary about the importance of a principled, scientific approach to tackling difficult questions.
The Race between Education and Technology
Why does education increase earnings? And why does the return to education vary so much across places and over different periods in history? The college wage premium ranges from 15 percent in Denmark and Sweden to 63 percent in the U.S. and 179 percent in Chile.